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The explore–exploit tension: A case study of organizing in a professional services firm

Published online by Cambridge University Press:  23 February 2017

Aaron C. T. Smith ,
David H. Gilbert  and
Fiona Sutherland
Aaron C. T. Smith*
Affiliation:
Graduate School of Business & Law, RMIT University, Melbourne, Australia
David H. Gilbert
Affiliation:
School of Management, RMIT University, Melbourne, Australia
Fiona Sutherland
Affiliation:
Department of Management & Marketing, La Trobe University, Melbourne, Australia
*
Corresponding author: [email protected]
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Abstract

This article reports on a case study of a decade-long organizing forms response to the need for groundbreaking innovation while maintaining existing operational performance – the explore–exploit conundrum. Employing ‘grounded research,’ data were collected on the experiences of the Asia-Pacific arm of a multinational professional service firm’s key decision-makers, innovators and entrepreneurs. The findings reveal a three-tiered organizing forms response to the explore–exploit paradox, characterized by a novel combination of heavy exploitation-driven actions alongside deep exploration projects. This case suggests that one successful approach to delivering on both explore and exploit focuses on a productive tension that emerges by enacting innovative organizing forms with contextual awareness. This productive tension was sufficiently powerful to impel individuals to innovate, but also sufficiently contained to avoid interfering with commercial outcomes. An explore–exploit framework conceptualizes organizational changes incorporating complexity and contradiction, without the implicit emphasis on removing or denying the existing tension.

Keywords

innovationorganizingexplore–exploitdualities
Type
Research Article
Information
Journal of Management & Organization , Volume 23 , Issue 4 , July 2017 , pp. 566 - 586
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2017 

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